{"id":4765,"date":"2024-03-23T18:16:02","date_gmt":"2024-03-23T18:16:02","guid":{"rendered":"https:\/\/patellawoffices.com\/blog\/?p=4765"},"modified":"2024-04-19T18:16:40","modified_gmt":"2024-04-19T18:16:40","slug":"employers-must-re-examine-employee-retention-credit-erc-claims","status":"publish","type":"post","link":"https:\/\/patellawoffices.com\/blog\/planning-for-tax-minimization\/employers-must-re-examine-employee-retention-credit-erc-claims\/","title":{"rendered":"Employers Must Re-examine Employee Retention Credit (ERC) Claims"},"content":{"rendered":"\n<p>The Employee Retention Credit (ERC) offered financial relief to businesses struggling due to COVID-19. However, many ineligible applicants filed claims, or requested excessive amounts, often misled by aggressive marketing tactics.<\/p>\n\n\n\n<p><strong>IRS Crackdown<\/strong><\/p>\n\n\n\n<p>The IRS is now aggressively focusing on these dubious claims:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Increased audits of ERC filings.<\/li>\n\n\n\n<li>New claim processing paused.<\/li>\n\n\n\n<li>Criminal investigations launched against promoters and businesses associated with improper claims.<\/li>\n<\/ul>\n\n\n\n<p><strong>Options for Employers with Incorrect Claims<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>ERC Voluntary Disclosure Program (Deadline was March 22, 2024; may be extended):<\/strong> Repay 80% of the incorrect ERC, with reduced penalties and interest. This offers some protection from future audits.<\/li>\n\n\n\n<li><strong>ERC Withdrawal Program (Ongoing):<\/strong> If your ERC refund hasn&#8217;t been paid yet, and you believe you&#8217;re ineligible, you can withdraw claims to avoid penalties. This option is available even after March 22nd.<\/li>\n<\/ul>\n\n\n\n<p><strong>Act Now<\/strong><\/p>\n\n\n\n<p>The IRS urges employers to reassess their ERC claims. The most beneficial option is to take advantage of the Voluntary Disclosure Program if it is available.<\/p>\n\n\n\n<p><strong>Warning Signs from the IRS<\/strong><\/p>\n\n\n\n<p>The IRS highlights common errors to watch for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Claiming too many quarters:<\/strong> Most businesses don&#8217;t qualify for every available quarter.<\/li>\n\n\n\n<li><strong>Unqualified government orders:<\/strong> Orders must have significantly impacted operations, not merely been recommendations.<\/li>\n\n\n\n<li><strong>Incorrect employee counts\/calculations:<\/strong> Rules changed over time, and large employers face extra restrictions.<\/li>\n\n\n\n<li><strong>Supply chain issues alone don&#8217;t qualify.<\/strong><\/li>\n\n\n\n<li><strong>Claiming ERC for periods without wages paid or when the business didn&#8217;t exist.<\/strong><\/li>\n\n\n\n<li><strong>Promoters claiming &#8220;no risk&#8221;:<\/strong> This is false.&nbsp; Incorrect claims bring penalties and potential audits.<\/li>\n<\/ul>\n\n\n\n<p><strong>Get Help<\/strong><\/p>\n\n\n\n<p>If you find errors in your ERC claims, consult a tax professional immediately to discuss the Voluntary Disclosure or Withdrawal programs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Employee Retention Credit (ERC) offered financial relief to businesses struggling due to COVID-19. However, many ineligible applicants filed claims, or requested excessive amounts, often misled by aggressive marketing tactics. IRS Crackdown The IRS is now aggressively focusing on these dubious claims: Options for Employers with Incorrect Claims Act Now The IRS urges employers to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"1","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4765","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=4765"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4765\/revisions"}],"predecessor-version":[{"id":4769,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4765\/revisions\/4769"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=4765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=4765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=4765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}